Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Index Options Rules, 13350-13354 [2022-04955]

Download as PDF 13350 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices IV. Solicitation of Comments on Amendment Nos. 1 and 2 Interested persons are invited to submit written data, views, and arguments concerning whether Amendment Nos. 1 and 2 are consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– MIAX–2021–58 on the subject line. jspears on DSK121TN23PROD with NOTICES1 Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–MIAX–2021–58. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–MIAX– 2021–58, and should be submitted on or before March 30, 2022. The Commission finds good cause to approve the proposed rule change, as 17:44 Mar 08, 2022 Jkt 256001 VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,68 that the proposed rule change (File No. SR– MIAX–2021–58), as modified by Amendment Nos. 1 and 2, is approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.69 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–04921 Filed 3–8–22; 8:45 am] BILLING CODE 8011–01–P V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 VerDate Sep<11>2014 modified by Amendment Nos. 1 and 2, prior to the thirtieth day after the date of publication of the notice of Amendment Nos. 1 and 2 in the Federal Register. As described more fully above, Amendment No. 1 revises the proposal to, among other things, indicate that, if enabled, the Managed Protection Override will apply to all of the price protections that are subject to the Managed Protection Override; add clarifying detail to the proposed definition of Butterfly Spread and to the Market Maker Single Side Protection; describe the treatment of orders and eQuotes priced outside the trading price limits in the proposed Butterfly Spread Variance, Calendar Spread Variance, and Vertical Spread Variance rules; add proposed Exchange Rule 532, Interpretation and Policy .01 to indicate that the System will apply the most conservative price protection when an order is eligible for multiple price protections; and describe the rationale for the pre-set value used in the proposed MIAX Strategy Price Protection Variance. Amendment No. 2 adds clarifying detail to the proposed MIAX Strategy Price Protection by describing how the price protection will apply to complex market orders. Amendment Nos. 1 and 2 raise no novel regulatory issues and provide additional detail and clarifications that help to more fully describe the operation of the proposed rules. In addition, the additional information in Amendment Nos. 1 and 2 assists the Commission in evaluating the Exchange’s proposal and finding that it is consistent with the Act. Accordingly, the Commission finds good cause for approving the proposed rule change, as modified by Amendment Nos. 1 and 2, on an accelerated basis. 68 15 69 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00100 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–94354; File No. SR–ISE– 2022–04] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Index Options Rules March 3, 2022. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 18, 2022, Nasdaq ISE, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend ISE Rules at Options 3, Section 1, Days and Hours of Business; Options 4A, Section 11, Trading Sessions; and Options 4A, Section 12, Terms of Index Options Contracts. The Exchange also proposes to adopt new Options 4A, Section 4 which is currently reserved. Finally, the Exchange proposes to make a technical amendment to Options 7, Section 1, General Provisions. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/ise/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\09MRN1.SGM 09MRN1 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend ISE Rules at Options 3, Section 1, Days and Hours of Business; Options 4A, Section 11, Trading Sessions; and Options 4A, Section 12, Terms of Index Options Contracts. The Exchange also proposes to adopt new Options 4A, Section 4 which is currently reserved. Finally, the Exchange proposes to make a technical amendment to Options 7, Section 1, General Provisions. Each change is described below. Options 3, Section 1 The Exchange proposes to amend Options 3, Section 1 concerning the Days and Hours of Business. The Exchange proposes to amend the title from ‘‘Days and Hours of Business’’ to ‘‘Hours of Business.’’ ISE recently filed to establish General 3, Section 1030, which governs the days the Exchange will be open for business.3 At this time the Exchange proposes to amend the first paragraph of Options 3, Section 1 which provides, ‘‘The Board shall determine the days the Exchange shall be open for business (referred to as ‘‘business days’’) and the hours of such days during which transactions may be made on the Exchange.’’ The Exchange proposes to remove this sentence and instead provide, ‘‘ISE shall be open for business as provided within General 3, Rule 1030.’’ This proposed text will make clear that while General 3, Section 1030 governs the days the Exchange will be open for business, the remainder of the rule addresses the hours of operation of the System and specific products. The Exchange also proposes to remove paragraph (e) as holidays are addressed within General 3, Section 1030. The remainder of the paragraphs are proposed to be re-lettered. jspears on DSK121TN23PROD with NOTICES1 Options 4A, Section 4 The Exchange proposes to adopt a new rule at Options 4A, Section 4, which is currently reserved, and title the rule ‘‘Index Options Values for Settlement.’’ Proposed Options 4A, 3 See Securities Exchange Act Release No. 93675 (November 29, 2021), 86 FR 68714 (December 3, 2021) (SR–NASDAQ–2021–69) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Include Juneteenth National Independence Day as a Holiday). ISE’s General 3 rules incorporate by reference The Nasdaq Stock Market LLC’s General 3 Rules. Rule 1030 of General 3 memorialized all current Exchange holidays and added a provision to permit the Exchange the authority to halt or suspend trading or close Exchange facilities for certain unanticipated closures. VerDate Sep<11>2014 17:44 Mar 08, 2022 Jkt 256001 Section 4 would specify the way the Exchange would arrive at index options values in cases where the Exchange’s index rules would not otherwise apply. The Exchange is relocating certain portions of current ISE Options 4A rules into proposed new Options 4A, Section 4 so all related rule text would be within the same rule. Proposed Options 4A, Section 4(a) rule text is being relocated from current rule text within Options 4A, Section 12(e) without change. The rule text currently provides that where Exchange index options rules do not apply, ISE index options would settle based on the current index value used to settle the exercise of an index options contract, which would be the closing index value for the day on which the index options contract is exercised in accordance with the Rules of The Options Clearing Corporation (‘‘OCC’’) or, if such day is not a business day, for the most recent business day. Proposed Options 4A, Section 4(b) rule text is being relocated from current rule text within Options 4A, Section 11(g) without change. The rule text currently provides for the current index value in the instance the primary market for a security underlying the current index value of an index option does not open for trading on a given day, which is an expiration day. In this case, the settlement price at expiration shall be the last reported sale price of the security from the previous trading day, unless the current index value at expiration is fixed in accordance with the Rules and By-Laws of OCC. The Exchange also proposes to add new rule text within Options 4A, Section 4(c) which states, With respect to any securities index on which options are traded on the Exchange, the source of the prices of component securities used to calculate the current index level at expiration is determined by the Reporting Authority for that index. This rule text is identical to the rule text within Phlx Options 4A, Section 4(c)(1) and Cboe Exchange, Inc. (‘‘Cboe’’) Rule 4.13 at .09 of Interpretations and Policies and follows the Exchange’s current practice.4 The purpose of the proposed rule change is to clarify that the Reporting Authority for a securities index on which options are traded on the Exchange is the source of prices of component securities used to calculate the current index level at expiration. Certain ISE rules may be 4 See Securities Exchange Act Release No. 50269 (August 26, 2004), 69 FR 53755 (September 2, 2004) (SR–CBOE–2004–42) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Calculation of Securities Indexes Underlying Options). PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 13351 interpreted in a manner that suggests that the current index value at expiration of any securities index is determined by the opening (or closing) prices of the underlying components as reported by each respective underlying component’s ‘‘primary market’’ such as current Options 4A, Section 11(g). Because Options 4A, Section 11(g) could be interpreted to mean that the primary market for each security that comprises an index will always be the source of opening and closing prices used in the calculation of the particular index’s value at expiration, the Exchange proposes to adopt the same rule text as Phlx and Cboe.5 The Exchange believes that Options 4A, Section 4 will provide a transparent reference to the way the Exchange arrives at index options values for settlement where the Exchange’s rules may not apply. With respect to a particular index, the Reporting Authority is the institution(s) or reporting service designated by the Exchange as the official source for calculating and determining the current value 6 or the closing index value of the index.7 As noted above, the rule text within ISE Options 4A, Section 11(g) is proposed to be relocated to ISE Options 4A, Section 4(b) without change. Options 4A, Section 12 The Exchange proposes to amend Options 4A, Section 12(a)(4) concerning European-style options, to reword the current rule text to make clear that the list which follows represents indexes on which options may be listed. The Exchange is also adding a reference to the p.m.-settled index options 8 which is proposed to be listed within proposed paragraph (a)(6)(i), described below. All of the indexes listed within Options 4A, Section 12(a)(4) are currently Europeanstyle. The p.m.-settled index option is 5 See Phlx Options 4A, Section 4(c)(1) and Cboe Rule 4.13 at .09 of Interpretations and Policies. 6 The term ‘‘current index value’’ with respect to a particular index options contract means the level of the underlying index reported by the reporting authority for the index, or any multiple or fraction of such reported level specified by the Exchange. The current index value with respect to a reducedvalue long term options contract is one-tenth of the current index value of the related index option. The ‘‘closing index value’’ shall be the last index value reported on a business day. See ISE Options 4A, Section 2(e). 7 See ISE Options 4A, Section 2(n). See also Supplementary Material .01 to Options 4A, Section 2. 8 Currently, the Exchange lists p.m.-settled products. This new paragraph will expand upon the current p.m.-settled products which are described in Options 4A, Section 12(a)(6) (an index option) and (b)(5) (nonstandard program). E:\FR\FM\09MRN1.SGM 09MRN1 13352 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices part of a pilot program.9 The proposed amendments merely organize the products as either a.m.-settled or p.m.settled within Options 4A, Section 12 for greater clarity. The proposed changes are non-substantive as they represent the way these products trade. The Exchange proposes to add the phrase ‘‘on the following indexes’’ to the end of Options 4A, Section 12(a)(4) and 12(a)(5) for clarity and relocate the word ‘‘following’’ within Options 4A, Section 12(a)(5), as well as make other minor technical amendments, in an effort to organize the lists of options indexes. The Exchange proposes to add a new paragraph (a)(6) within Options 4A, Section 12 which describes the manner in which p.m.-settled index options 10 are handled today. This language is consistent with how p.m.-settled index options on ISE are treated today. This new paragraph would provide: P.M.—Settled Index Options. The last day of trading for P.M.-settled index options shall be the business day of expiration, or, in the case of an option contract expiring on a day that is not a business day, on the last business day before its expiration date. The current index value at expiration of the index is determined by the last reported sale price of each component security. In the event that the primary market for an underlying security does not open for trading on the expiration date, the price of that security shall be the last reported sale price prior to the expiration date. The following P.M.settled index options are approved for trading on ISE: This paragraph would serve to distinguish a.m.-settled and p.m.-settled index options as there is a similar paragraph regarding a.m.-settled index options within Options 4A, Section 12(a)(5). The Exchange proposes to re-number current paragraph (a)(6) as (a)(6)(i) of Options 4A, Section 12. Current Options 4A, Section 12(a)(6) describes the Nasdaq 100 Reduced Value Index (‘‘NQX’’) which is a p.m.-settled index that is subject to a pilot program.11 The jspears on DSK121TN23PROD with NOTICES1 9 See ISE Options 4A, Section 12(a)(6) (an index option) and Supplementary Material .07 to Options 4A, Section 12 (nonstandard program). 10 The Nasdaq Options Market LLC (‘‘NOM’’) Rules at Options 4A, Section 12(a)(6) and Phlx Options 4A, Section 12(f) contain a paragraph describing p.m.-settled index options. 11 See Securities Exchange Act Release Nos. 82911 (March 20, 2018), 83 FR 12966 (March 26, 2018) (SR–ISE–2017–106) (Approval Order); 86071 (June 10, 2019), 84 FR 27822 (June 14, 2019) (SR– ISE–2019–18); 87379 (October 22, 2019), 84 FR 57793 (October 28, 2019) (SR–ISE–2019–27); 88683 (April 17, 2020), 85 FR 22768 (April 23, 2020) (SR– ISE–2020–18); 90257 (October 22, 2020), 85 FR 68387 (October 28, 2020) (SR–ISE–2020–33); 91485 (April 6, 2021), 86 FR 19052 (April 12, 2021) (SR– ISE–2021–05); and 93449 (October 28, 2021), 86 FR 60679 (November 3, 2021); and 93448 (October 28, VerDate Sep<11>2014 17:44 Mar 08, 2022 Jkt 256001 Non-Standard Program, another p.m.settled product, is separately described in detail within Options 4A, Section 12(b)(5).12 These are both pilot programs. The proposed changes are non-substantive and merely seek to categorize existing products which were all filed with the Commission. Finally, the Exchange proposes to amend current Options 4A, Section 12(d) to remove references to a.m.settled index options because p.m.settled index options are listed on ISE as well. By removing the phrase, ‘‘at the expiration of an A.M.-settled index option’’ the paragraph would apply to both a.m.-settled and p.m.-settled index options. Currently, Options 4A, Section 12(d) applies to p.m.-settled index options. The Exchange is not otherwise amending Options 4A, Section 12(d). Options 4A, Section 12(d) describes the manner in which the reported level of the underlying index that is calculated by the reporting authority may differ from the level of the index that is separately calculated and reported by the reporting authority. As noted above, Options 4A, Section 12(e) is proposed to be relocated to Options 4A, Section 4(a) without change. Technical Amendments The Exchange proposes to amend Options 7, Section 1, General Provisions, to add a ‘‘(c)’’ before certain defined terms to provide a way to cite to that rule text. This amendment is non-substantive. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,13 in general, and furthers the objectives of Section 6(b)(5) of the Act,14 in particular, in that it is designed to promote just and equitable principles of trade and to protect investors and the public interest. 2021), 86 FR 60717 (November 3, 2021) (SR–ISE– 2021–22). 12 See Securities Exchange Act Release Nos. 82612 (February 1, 2018), 83 FR 5470 (February 7, 2018) (approving SR–ISE–2017–111) (Order Approving a Proposed Rule Change To Establish a Nonstandard Expirations Pilot Program); 85030 (February 1, 2019), 84 FR 2633 (February 7, 2019) (SR–ISE–2019–01); 85672 (April 17, 2019), 84 FR 16899 (April 23, 2019) (SR–ISE–2019–11); 87380 (October 22, 2019), 84 FR 57786 (October 28, 2019) (SR–ISE–2019–28); 88681 (April 17, 2020), 85 FR 22775 (April 23, 2020) (SR–ISE–2020–17); 90265 (October 23, 2020), 85 FR 68605 (October 29, 2020) (SR–ISE–2020–34); 91486 (April 6, 2021), 86 FR 19048 (April 12, 2021) (SR–ISE–2021–06); and 93449 (October 28, 2021), 86 FR 60679 (November 3, 2021) (SR–ISE–2021–23). 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(5). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 Options 3, Section 1 The Exchange’s proposal to amend Options 3, Section 1 concerning the Days and Hours of Business is consistent with the Act. The proposal to amend the title from ‘‘Days and Hours of Business’’ to ‘‘Hours of Business’’ will bring greater clarity to the rule. BX recently filed to establish General 3, Section 1030, which governs the days the Exchange will be open for business.15 Amending the rule text to reference General 3, Section 1030 will provide Members with a guidepost as to where to locate the rule that applies to the days the Exchange is open for business. Finally removing Options 3, Section 1(e) will avoid confusion. Options 4A, Section 4 The Exchange’s proposal to adopt a new rule at Options 4A, Section 4, which is currently reserved, and title the rule ‘‘Index Options Values for Settlement’’ is consistent with the Act. Proposed Options 4A, Section 4 would specify the way the Exchange would arrive at index options values in cases where the Exchange’s index rules would not otherwise apply. The Exchange is relocating certain portions of current Phlx Options 4A rules into proposed new Options 4A, Section 4, without change, so all related rule text would be within the same rule. The relocation of certain rule text within Options 4A, without change, is non-substantive. The proposal to add rule text within Options 4A, Section 4(c), which is identical to rule text within Phlx Options 4A, Section 4(c)(1) and Cboe Rule 4.13 at .09 of Interpretations and Policies is consistent with the Act. The proposed language is consistent with current practice. The Reporting Authority is the source of prices of component securities used to calculate the current index level at expiration. Today, ISE rules may be interpreted in a manner that suggests that the current index value at expiration of any particular securities index is determined by the opening (or closing) prices of the underlying components as reported by each respective underlying component’s ‘‘primary market’’ such as current Options 4A, Section 11(g). Because Options 4A, Section 11(g) could be interpreted to mean that the primary market for each security that comprises an index will always be the source of opening and closing prices used in the calculation of the particular index’s value at expiration, the Exchange 15 See E:\FR\FM\09MRN1.SGM note 3 above. 09MRN1 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices proposes to adopt rule text identical to Phlx and Cboe.16 The Exchange believes that this proposed rule will provide a transparent reference to the way the Exchange arrives at index options values for settlement where the Exchange’s rules may not apply. With respect to a particular index, the Reporting Authority is the institution(s) or reporting service designated by the Exchange as the official source for calculating and determining the current value 17 or the closing index value of the index.18 jspears on DSK121TN23PROD with NOTICES1 Options 4A, Section 12 The Exchange’s proposal to amend Options 4A, Section 12(a)(4) concerning European-style options, to reword the current rule text to make clear that the list which follows represents indexes on which options may be listed is consistent with the Act. The current language does not distinguish between a.m.-settled and p.m.-settled index options. Adding a paragraph describing a p.m.-settled index option 19 to proposed Options 4A, Section 12(a)(6) will make clear the index within proposed Options 4A, Section 12(a)(6)(i) is p.m.-settled. The only index that is p.m.-settled is part of a pilot program.20 The proposed amendments merely organize the products as either a.m.settled or p.m.-settled within Options 4A, Section 12 for greater clarity. The proposed changes are non-substantive as they represent the way these products trade. Further, adding new paragraph (a)(6) within Options 4A, Section 12 which describes a p.m.-settled index options will serve to distinguish a.m.settled and p.m.-settled index options. Rewording current Options 4A, Section 12(d) to remove references to a.m.-settled index options is consistent with the Act as p.m.-settled index options are listed on ISE as well. By removing the phrase, ‘‘at the expiration of an A.M.-settled index option’’ the paragraph would apply to both a.m.settled and p.m.-settled index options. Currently, Options 4A, Section 12(d) applies to p.m.-settled index options. Options 4A, Section 12(d) describes the way the reported level of the underlying index that is calculated by the reporting authority may differ from the level of the index that is separately calculated and reported by the reporting authority. 16 See note 5 above. note 6 above. 18 See note 7 above. 19 See note 8 above. 20 See note 9 above. 17 See VerDate Sep<11>2014 17:44 Mar 08, 2022 Jkt 256001 The remainder of the proposed changes to Options 4A, Section 12 are technical and non-substantive. Technical Amendments The Exchange’s proposal to amend Options 7, Section 1, General Provisions, to add a ‘‘(c)’’ before certain defined terms to provide a way to cite to that rule text is a non-substantive amendment. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Options 3, Section 1 The Exchange’s proposal to amend Options 3, Section 1 concerning the Days and Hours of Business does not impose an undue burden on competition. The proposal to amend the title from ‘‘Days and Hours of Business’’ to ‘‘Hours of Business’’ will bring greater clarity to the rule. Amending the rule text to reference General 3, Section 1030 will provide Members with a guidepost as to where to locate the rule that applies to the days the Exchange is open for business. Finally, the removal of Options 3, Section 1(e) will avoid confusion. Options 4A, Section 4 The Exchange’s proposal to adopt a new rule at Options 4A, Section 4, does not impose an undue burden on competition. Proposed Options 4A, Section 4 would specify the way the Exchange would arrive at index options values in cases where the Exchange’s index rules would not otherwise apply. The Exchange is relocating certain portions of current Phlx Options 4A rules into proposed new Options 4A, Section 4, without change and, therefore, those amendments are nonsubstantive. The proposal to add rule text within Options 4A, Section 4(c), which is identical to rule text within Phlx Options 4A, Section 4(c)(1) and Cboe Rule 4.13 at .09 of Interpretations and Policies, and which follows the Exchange’s current practice, does not impose an undue burden on competition. The Reporting Authority is the source of prices of component securities used to calculate the current index level at expiration. The Exchange believes that this proposed rule will provide a transparent reference to the way the Exchange arrives at index options values for settlement where the Exchange’s rules may not apply. The addition of this information to the rules PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 13353 will bring greater clarity and transparency to the Exchange’s Rules. Options 4A, Section 12 The Exchange’s proposal to amend Options 4A, Section 12(a)(4) concerning European-style options, to reword the current rule text to make clear that the list which follows represents indexes on which options may be listed does not impose an undue burden on competition. The current language does not distinguish between a.m.-settled and p.m.-settled index options. Adding a paragraph describing a p.m.-settled index options 21 to proposed Options 4A, Section 12(a)(6) will make clear the index within proposed Options 4A, Section 12(a)(6)(i) is p.m.-settled. This p.m.-settled index is part of a pilot program.22 The proposed amendments merely organize the products as either a.m.-settled or p.m.-settled within Options 4A, Section 12 for greater clarity. Rewording current Options 4A, Section 12(d) to remove references to a.m.-settled index options does not impose an undue burden on competition as p.m.-settled index options are listed on ISE as well. By removing the phrase, ‘‘at the expiration of an A.M.-settled index option’’ the paragraph would apply to p.m.-settled index options as well, as is the case today. Technical Amendments The Exchange’s proposal to amend Options 7, Section 1, General Provisions, to add a ‘‘(c)’’ before certain defined terms to provide a way to cite to that rule text is a non-substantive amendment. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 23 and 21 See note 8 above. note 9 above. 23 15 U.S.C. 78s(b)(3)(A)(iii). 22 See E:\FR\FM\09MRN1.SGM 09MRN1 13354 Federal Register / Vol. 87, No. 46 / Wednesday, March 9, 2022 / Notices subparagraph (f)(6) of Rule 19b–4 thereunder.24 A proposed rule change filed under Rule 19b–4(f)(6) 25 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),26 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. As the proposal raises no new or novel issues, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission waives the 30-day operative delay and designates the proposed rule change operative upon filing.27 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– ISE–2022–04 on the subject line. jspears on DSK121TN23PROD with NOTICES1 Paper Comments • Send paper comments in triplicate to Securities and Exchange Commission, 24 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 25 17 CFR 240.19b–4(f)(6). 26 17 CFR 240.19b–4(f)(6)(iii). 27 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 17:44 Mar 08, 2022 Jkt 256001 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2022–04. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE– 2022–04 and should be submitted on or before March 30, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–04955 Filed 3–8–22; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Opportunity for Public Comment on Release of Federally Obligated Land at the Myrtle Beach International Airport (MYR), Myrtle Beach, SC Federal Aviation Administration (FAA), Transportation (DOT). ACTION: Notice. AGENCY: The FAA proposes to rule and invites public comment on the release of SUMMARY: 28 17 PO 00000 CFR 200.30–3(a)(12). Frm 00104 Fmt 4703 Sfmt 4703 land at the Myrtle Beach International Airport (MYR), Myrtle Beach, South Carolina. DATES: Comments must be received on or before April 8, 2022. ADDRESSES: Documents are available for review by prior appointment at the following location: Atlanta Airports District Office, Attn: Joseph Robinson, Planner, 1701 Columbia Ave., Suite 220, College Park, Georgia 30337–2747, Telephone: (404) 305–6749. Comments on this notice may be mailed or delivered in triplicate to the FAA at the following address: Atlanta Airports District Office, Attn: Joseph Robinson, Planner, 1701 Columbia Ave., Suite 220, College Park, Georgia 30337– 2747. In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Breck Dunne, Director of Airport Development, Myrtle Beach International Airport at the following address: 1100 Jetport Rd., Myrtle Beach, South Carolina 29577. FOR FURTHER INFORMATION CONTACT: Joseph Robinson, Airport Planner, Atlanta Airports District Office, 1701 Columbia Ave., Suite 220, College Park, Georgia 30337–2747, (404) 305–6749. The application may be reviewed in person at this same location. SUPPLEMENTARY INFORMATION: The FAA invites public comment on the request to release and sell one tract of land consisting of approximately 21.12 acres of airport property at the Myrtle Beach International Airport (MYR) under the provisions of 49 U.S.C. 47107(h)(2). On March 2, 2022, the FAA determined the request to release property at the Myrtle Beack International Airport (MYR) submitted by the Sponsor meets the procedural requirements of the Federal Aviation Administration and the release of the property does not and will not impact future aviation needs at the airport. The FAA may approve the request, in whole or in part, no sooner than thirty days after the publication of this notice. The following is a brief overview of the request: The Myrtle Beach International Airport (MYR) is proposing the release of airport property containing 20.12 acres, more or less. The release of land is necessary to comply with Federal Aviation Administration Grant Assurances that do not allow federally acquired airport property to be used for non-aviation purposes. The sale of the subject property will result in the land at the Myrtle Beach International Airport (MYR) being changed from aeronautical to non-aeronautical use and release the lands from the E:\FR\FM\09MRN1.SGM 09MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 87, Number 46 (Wednesday, March 9, 2022)]
[Notices]
[Pages 13350-13354]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04955]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94354; File No. SR-ISE-2022-04]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Index 
Options Rules

March 3, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 18, 2022, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend ISE Rules at Options 3, Section 1, 
Days and Hours of Business; Options 4A, Section 11, Trading Sessions; 
and Options 4A, Section 12, Terms of Index Options Contracts. The 
Exchange also proposes to adopt new Options 4A, Section 4 which is 
currently reserved. Finally, the Exchange proposes to make a technical 
amendment to Options 7, Section 1, General Provisions.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/ise/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 13351]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend ISE Rules at Options 3, Section 1, 
Days and Hours of Business; Options 4A, Section 11, Trading Sessions; 
and Options 4A, Section 12, Terms of Index Options Contracts. The 
Exchange also proposes to adopt new Options 4A, Section 4 which is 
currently reserved. Finally, the Exchange proposes to make a technical 
amendment to Options 7, Section 1, General Provisions. Each change is 
described below.
Options 3, Section 1
    The Exchange proposes to amend Options 3, Section 1 concerning the 
Days and Hours of Business. The Exchange proposes to amend the title 
from ``Days and Hours of Business'' to ``Hours of Business.'' ISE 
recently filed to establish General 3, Section 1030, which governs the 
days the Exchange will be open for business.\3\ At this time the 
Exchange proposes to amend the first paragraph of Options 3, Section 1 
which provides, ``The Board shall determine the days the Exchange shall 
be open for business (referred to as ``business days'') and the hours 
of such days during which transactions may be made on the Exchange.'' 
The Exchange proposes to remove this sentence and instead provide, 
``ISE shall be open for business as provided within General 3, Rule 
1030.'' This proposed text will make clear that while General 3, 
Section 1030 governs the days the Exchange will be open for business, 
the remainder of the rule addresses the hours of operation of the 
System and specific products. The Exchange also proposes to remove 
paragraph (e) as holidays are addressed within General 3, Section 1030. 
The remainder of the paragraphs are proposed to be re-lettered.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 93675 (November 29, 
2021), 86 FR 68714 (December 3, 2021) (SR-NASDAQ-2021-69) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To 
Include Juneteenth National Independence Day as a Holiday). ISE's 
General 3 rules incorporate by reference The Nasdaq Stock Market 
LLC's General 3 Rules. Rule 1030 of General 3 memorialized all 
current Exchange holidays and added a provision to permit the 
Exchange the authority to halt or suspend trading or close Exchange 
facilities for certain unanticipated closures.
---------------------------------------------------------------------------

Options 4A, Section 4
    The Exchange proposes to adopt a new rule at Options 4A, Section 4, 
which is currently reserved, and title the rule ``Index Options Values 
for Settlement.'' Proposed Options 4A, Section 4 would specify the way 
the Exchange would arrive at index options values in cases where the 
Exchange's index rules would not otherwise apply. The Exchange is 
relocating certain portions of current ISE Options 4A rules into 
proposed new Options 4A, Section 4 so all related rule text would be 
within the same rule.
    Proposed Options 4A, Section 4(a) rule text is being relocated from 
current rule text within Options 4A, Section 12(e) without change. The 
rule text currently provides that where Exchange index options rules do 
not apply, ISE index options would settle based on the current index 
value used to settle the exercise of an index options contract, which 
would be the closing index value for the day on which the index options 
contract is exercised in accordance with the Rules of The Options 
Clearing Corporation (``OCC'') or, if such day is not a business day, 
for the most recent business day.
    Proposed Options 4A, Section 4(b) rule text is being relocated from 
current rule text within Options 4A, Section 11(g) without change. The 
rule text currently provides for the current index value in the 
instance the primary market for a security underlying the current index 
value of an index option does not open for trading on a given day, 
which is an expiration day. In this case, the settlement price at 
expiration shall be the last reported sale price of the security from 
the previous trading day, unless the current index value at expiration 
is fixed in accordance with the Rules and By-Laws of OCC.
    The Exchange also proposes to add new rule text within Options 4A, 
Section 4(c) which states,

    With respect to any securities index on which options are traded 
on the Exchange, the source of the prices of component securities 
used to calculate the current index level at expiration is 
determined by the Reporting Authority for that index.

    This rule text is identical to the rule text within Phlx Options 
4A, Section 4(c)(1) and Cboe Exchange, Inc. (``Cboe'') Rule 4.13 at .09 
of Interpretations and Policies and follows the Exchange's current 
practice.\4\ The purpose of the proposed rule change is to clarify that 
the Reporting Authority for a securities index on which options are 
traded on the Exchange is the source of prices of component securities 
used to calculate the current index level at expiration. Certain ISE 
rules may be interpreted in a manner that suggests that the current 
index value at expiration of any securities index is determined by the 
opening (or closing) prices of the underlying components as reported by 
each respective underlying component's ``primary market'' such as 
current Options 4A, Section 11(g). Because Options 4A, Section 11(g) 
could be interpreted to mean that the primary market for each security 
that comprises an index will always be the source of opening and 
closing prices used in the calculation of the particular index's value 
at expiration, the Exchange proposes to adopt the same rule text as 
Phlx and Cboe.\5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 50269 (August 26, 
2004), 69 FR 53755 (September 2, 2004) (SR-CBOE-2004-42) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to the Calculation of Securities Indexes Underlying Options).
    \5\ See Phlx Options 4A, Section 4(c)(1) and Cboe Rule 4.13 at 
.09 of Interpretations and Policies.
---------------------------------------------------------------------------

    The Exchange believes that Options 4A, Section 4 will provide a 
transparent reference to the way the Exchange arrives at index options 
values for settlement where the Exchange's rules may not apply. With 
respect to a particular index, the Reporting Authority is the 
institution(s) or reporting service designated by the Exchange as the 
official source for calculating and determining the current value \6\ 
or the closing index value of the index.\7\
---------------------------------------------------------------------------

    \6\ The term ``current index value'' with respect to a 
particular index options contract means the level of the underlying 
index reported by the reporting authority for the index, or any 
multiple or fraction of such reported level specified by the 
Exchange. The current index value with respect to a reduced-value 
long term options contract is one-tenth of the current index value 
of the related index option. The ``closing index value'' shall be 
the last index value reported on a business day. See ISE Options 4A, 
Section 2(e).
    \7\ See ISE Options 4A, Section 2(n). See also Supplementary 
Material .01 to Options 4A, Section 2.
---------------------------------------------------------------------------

    As noted above, the rule text within ISE Options 4A, Section 11(g) 
is proposed to be relocated to ISE Options 4A, Section 4(b) without 
change.
Options 4A, Section 12
    The Exchange proposes to amend Options 4A, Section 12(a)(4) 
concerning European-style options, to reword the current rule text to 
make clear that the list which follows represents indexes on which 
options may be listed. The Exchange is also adding a reference to the 
p.m.-settled index options \8\ which is proposed to be listed within 
proposed paragraph (a)(6)(i), described below. All of the indexes 
listed within Options 4A, Section 12(a)(4) are currently European-
style. The p.m.-settled index option is

[[Page 13352]]

part of a pilot program.\9\ The proposed amendments merely organize the 
products as either a.m.-settled or p.m.-settled within Options 4A, 
Section 12 for greater clarity. The proposed changes are non-
substantive as they represent the way these products trade. The 
Exchange proposes to add the phrase ``on the following indexes'' to the 
end of Options 4A, Section 12(a)(4) and 12(a)(5) for clarity and 
relocate the word ``following'' within Options 4A, Section 12(a)(5), as 
well as make other minor technical amendments, in an effort to organize 
the lists of options indexes.
---------------------------------------------------------------------------

    \8\ Currently, the Exchange lists p.m.-settled products. This 
new paragraph will expand upon the current p.m.-settled products 
which are described in Options 4A, Section 12(a)(6) (an index 
option) and (b)(5) (nonstandard program).
    \9\ See ISE Options 4A, Section 12(a)(6) (an index option) and 
Supplementary Material .07 to Options 4A, Section 12 (nonstandard 
program).
---------------------------------------------------------------------------

    The Exchange proposes to add a new paragraph (a)(6) within Options 
4A, Section 12 which describes the manner in which p.m.-settled index 
options \10\ are handled today. This language is consistent with how 
p.m.-settled index options on ISE are treated today. This new paragraph 
would provide:
---------------------------------------------------------------------------

    \10\ The Nasdaq Options Market LLC (``NOM'') Rules at Options 
4A, Section 12(a)(6) and Phlx Options 4A, Section 12(f) contain a 
paragraph describing p.m.-settled index options.

    P.M.--Settled Index Options. The last day of trading for P.M.-
settled index options shall be the business day of expiration, or, 
in the case of an option contract expiring on a day that is not a 
business day, on the last business day before its expiration date. 
The current index value at expiration of the index is determined by 
the last reported sale price of each component security. In the 
event that the primary market for an underlying security does not 
open for trading on the expiration date, the price of that security 
shall be the last reported sale price prior to the expiration date. 
The following P.M.-settled index options are approved for trading on 
---------------------------------------------------------------------------
ISE:

    This paragraph would serve to distinguish a.m.-settled and p.m.-
settled index options as there is a similar paragraph regarding a.m.-
settled index options within Options 4A, Section 12(a)(5).
    The Exchange proposes to re-number current paragraph (a)(6) as 
(a)(6)(i) of Options 4A, Section 12. Current Options 4A, Section 
12(a)(6) describes the Nasdaq 100 Reduced Value Index (``NQX'') which 
is a p.m.-settled index that is subject to a pilot program.\11\ The 
Non-Standard Program, another p.m.-settled product, is separately 
described in detail within Options 4A, Section 12(b)(5).\12\ These are 
both pilot programs. The proposed changes are non-substantive and 
merely seek to categorize existing products which were all filed with 
the Commission.
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release Nos. 82911 (March 20, 
2018), 83 FR 12966 (March 26, 2018) (SR-ISE-2017-106) (Approval 
Order); 86071 (June 10, 2019), 84 FR 27822 (June 14, 2019) (SR-ISE-
2019-18); 87379 (October 22, 2019), 84 FR 57793 (October 28, 2019) 
(SR-ISE-2019-27); 88683 (April 17, 2020), 85 FR 22768 (April 23, 
2020) (SR-ISE-2020-18); 90257 (October 22, 2020), 85 FR 68387 
(October 28, 2020) (SR-ISE-2020-33); 91485 (April 6, 2021), 86 FR 
19052 (April 12, 2021) (SR-ISE-2021-05); and 93449 (October 28, 
2021), 86 FR 60679 (November 3, 2021); and 93448 (October 28, 2021), 
86 FR 60717 (November 3, 2021) (SR-ISE-2021-22).
    \12\ See Securities Exchange Act Release Nos. 82612 (February 1, 
2018), 83 FR 5470 (February 7, 2018) (approving SR-ISE-2017-111) 
(Order Approving a Proposed Rule Change To Establish a Nonstandard 
Expirations Pilot Program); 85030 (February 1, 2019), 84 FR 2633 
(February 7, 2019) (SR-ISE-2019-01); 85672 (April 17, 2019), 84 FR 
16899 (April 23, 2019) (SR-ISE-2019-11); 87380 (October 22, 2019), 
84 FR 57786 (October 28, 2019) (SR-ISE-2019-28); 88681 (April 17, 
2020), 85 FR 22775 (April 23, 2020) (SR-ISE-2020-17); 90265 (October 
23, 2020), 85 FR 68605 (October 29, 2020) (SR-ISE-2020-34); 91486 
(April 6, 2021), 86 FR 19048 (April 12, 2021) (SR-ISE-2021-06); and 
93449 (October 28, 2021), 86 FR 60679 (November 3, 2021) (SR-ISE-
2021-23).
---------------------------------------------------------------------------

    Finally, the Exchange proposes to amend current Options 4A, Section 
12(d) to remove references to a.m.-settled index options because p.m.-
settled index options are listed on ISE as well. By removing the 
phrase, ``at the expiration of an A.M.-settled index option'' the 
paragraph would apply to both a.m.-settled and p.m.-settled index 
options. Currently, Options 4A, Section 12(d) applies to p.m.-settled 
index options. The Exchange is not otherwise amending Options 4A, 
Section 12(d). Options 4A, Section 12(d) describes the manner in which 
the reported level of the underlying index that is calculated by the 
reporting authority may differ from the level of the index that is 
separately calculated and reported by the reporting authority.
    As noted above, Options 4A, Section 12(e) is proposed to be 
relocated to Options 4A, Section 4(a) without change.
Technical Amendments
    The Exchange proposes to amend Options 7, Section 1, General 
Provisions, to add a ``(c)'' before certain defined terms to provide a 
way to cite to that rule text. This amendment is non-substantive.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\13\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\14\ in particular, in that it is designed to 
promote just and equitable principles of trade and to protect investors 
and the public interest.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Options 3, Section 1
    The Exchange's proposal to amend Options 3, Section 1 concerning 
the Days and Hours of Business is consistent with the Act. The proposal 
to amend the title from ``Days and Hours of Business'' to ``Hours of 
Business'' will bring greater clarity to the rule. BX recently filed to 
establish General 3, Section 1030, which governs the days the Exchange 
will be open for business.\15\ Amending the rule text to reference 
General 3, Section 1030 will provide Members with a guidepost as to 
where to locate the rule that applies to the days the Exchange is open 
for business. Finally removing Options 3, Section 1(e) will avoid 
confusion.
---------------------------------------------------------------------------

    \15\ See note 3 above.
---------------------------------------------------------------------------

Options 4A, Section 4
    The Exchange's proposal to adopt a new rule at Options 4A, Section 
4, which is currently reserved, and title the rule ``Index Options 
Values for Settlement'' is consistent with the Act. Proposed Options 
4A, Section 4 would specify the way the Exchange would arrive at index 
options values in cases where the Exchange's index rules would not 
otherwise apply. The Exchange is relocating certain portions of current 
Phlx Options 4A rules into proposed new Options 4A, Section 4, without 
change, so all related rule text would be within the same rule.
    The relocation of certain rule text within Options 4A, without 
change, is non-substantive. The proposal to add rule text within 
Options 4A, Section 4(c), which is identical to rule text within Phlx 
Options 4A, Section 4(c)(1) and Cboe Rule 4.13 at .09 of 
Interpretations and Policies is consistent with the Act. The proposed 
language is consistent with current practice. The Reporting Authority 
is the source of prices of component securities used to calculate the 
current index level at expiration. Today, ISE rules may be interpreted 
in a manner that suggests that the current index value at expiration of 
any particular securities index is determined by the opening (or 
closing) prices of the underlying components as reported by each 
respective underlying component's ``primary market'' such as current 
Options 4A, Section 11(g). Because Options 4A, Section 11(g) could be 
interpreted to mean that the primary market for each security that 
comprises an index will always be the source of opening and closing 
prices used in the calculation of the particular index's value at 
expiration, the Exchange

[[Page 13353]]

proposes to adopt rule text identical to Phlx and Cboe.\16\
---------------------------------------------------------------------------

    \16\ See note 5 above.
---------------------------------------------------------------------------

    The Exchange believes that this proposed rule will provide a 
transparent reference to the way the Exchange arrives at index options 
values for settlement where the Exchange's rules may not apply. With 
respect to a particular index, the Reporting Authority is the 
institution(s) or reporting service designated by the Exchange as the 
official source for calculating and determining the current value \17\ 
or the closing index value of the index.\18\
---------------------------------------------------------------------------

    \17\ See note 6 above.
    \18\ See note 7 above.
---------------------------------------------------------------------------

Options 4A, Section 12
    The Exchange's proposal to amend Options 4A, Section 12(a)(4) 
concerning European-style options, to reword the current rule text to 
make clear that the list which follows represents indexes on which 
options may be listed is consistent with the Act. The current language 
does not distinguish between a.m.-settled and p.m.-settled index 
options. Adding a paragraph describing a p.m.-settled index option \19\ 
to proposed Options 4A, Section 12(a)(6) will make clear the index 
within proposed Options 4A, Section 12(a)(6)(i) is p.m.-settled. The 
only index that is p.m.-settled is part of a pilot program.\20\ The 
proposed amendments merely organize the products as either a.m.-settled 
or p.m.-settled within Options 4A, Section 12 for greater clarity. The 
proposed changes are non-substantive as they represent the way these 
products trade. Further, adding new paragraph (a)(6) within Options 4A, 
Section 12 which describes a p.m.-settled index options will serve to 
distinguish a.m.-settled and p.m.-settled index options.
---------------------------------------------------------------------------

    \19\ See note 8 above.
    \20\ See note 9 above.
---------------------------------------------------------------------------

    Rewording current Options 4A, Section 12(d) to remove references to 
a.m.-settled index options is consistent with the Act as p.m.-settled 
index options are listed on ISE as well. By removing the phrase, ``at 
the expiration of an A.M.-settled index option'' the paragraph would 
apply to both a.m.-settled and p.m.-settled index options. Currently, 
Options 4A, Section 12(d) applies to p.m.-settled index options. 
Options 4A, Section 12(d) describes the way the reported level of the 
underlying index that is calculated by the reporting authority may 
differ from the level of the index that is separately calculated and 
reported by the reporting authority.
    The remainder of the proposed changes to Options 4A, Section 12 are 
technical and non-substantive.
Technical Amendments
    The Exchange's proposal to amend Options 7, Section 1, General 
Provisions, to add a ``(c)'' before certain defined terms to provide a 
way to cite to that rule text is a non-substantive amendment.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
Options 3, Section 1
    The Exchange's proposal to amend Options 3, Section 1 concerning 
the Days and Hours of Business does not impose an undue burden on 
competition. The proposal to amend the title from ``Days and Hours of 
Business'' to ``Hours of Business'' will bring greater clarity to the 
rule. Amending the rule text to reference General 3, Section 1030 will 
provide Members with a guidepost as to where to locate the rule that 
applies to the days the Exchange is open for business. Finally, the 
removal of Options 3, Section 1(e) will avoid confusion.
Options 4A, Section 4
    The Exchange's proposal to adopt a new rule at Options 4A, Section 
4, does not impose an undue burden on competition. Proposed Options 4A, 
Section 4 would specify the way the Exchange would arrive at index 
options values in cases where the Exchange's index rules would not 
otherwise apply. The Exchange is relocating certain portions of current 
Phlx Options 4A rules into proposed new Options 4A, Section 4, without 
change and, therefore, those amendments are non-substantive. The 
proposal to add rule text within Options 4A, Section 4(c), which is 
identical to rule text within Phlx Options 4A, Section 4(c)(1) and Cboe 
Rule 4.13 at .09 of Interpretations and Policies, and which follows the 
Exchange's current practice, does not impose an undue burden on 
competition. The Reporting Authority is the source of prices of 
component securities used to calculate the current index level at 
expiration. The Exchange believes that this proposed rule will provide 
a transparent reference to the way the Exchange arrives at index 
options values for settlement where the Exchange's rules may not apply. 
The addition of this information to the rules will bring greater 
clarity and transparency to the Exchange's Rules.
Options 4A, Section 12
    The Exchange's proposal to amend Options 4A, Section 12(a)(4) 
concerning European-style options, to reword the current rule text to 
make clear that the list which follows represents indexes on which 
options may be listed does not impose an undue burden on competition. 
The current language does not distinguish between a.m.-settled and 
p.m.-settled index options. Adding a paragraph describing a p.m.-
settled index options \21\ to proposed Options 4A, Section 12(a)(6) 
will make clear the index within proposed Options 4A, Section 
12(a)(6)(i) is p.m.-settled. This p.m.-settled index is part of a pilot 
program.\22\ The proposed amendments merely organize the products as 
either a.m.-settled or p.m.-settled within Options 4A, Section 12 for 
greater clarity. Rewording current Options 4A, Section 12(d) to remove 
references to a.m.-settled index options does not impose an undue 
burden on competition as p.m.-settled index options are listed on ISE 
as well. By removing the phrase, ``at the expiration of an A.M.-settled 
index option'' the paragraph would apply to p.m.-settled index options 
as well, as is the case today.
---------------------------------------------------------------------------

    \21\ See note 8 above.
    \22\ See note 9 above.
---------------------------------------------------------------------------

Technical Amendments
    The Exchange's proposal to amend Options 7, Section 1, General 
Provisions, to add a ``(c)'' before certain defined terms to provide a 
way to cite to that rule text is a non-substantive amendment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \23\ and

[[Page 13354]]

subparagraph (f)(6) of Rule 19b-4 thereunder.\24\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \24\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \25\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\26\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requests 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. As the proposal 
raises no new or novel issues, the Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Accordingly, the Commission waives the 30-day 
operative delay and designates the proposed rule change operative upon 
filing.\27\
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    \25\ 17 CFR 240.19b-4(f)(6).
    \26\ 17 CFR 240.19b-4(f)(6)(iii).
    \27\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-ISE-2022-04 on the subject line.

Paper Comments

     Send paper comments in triplicate to Securities and 
Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2022-04. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISE-2022-04 and should be 
submitted on or before March 30, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-04955 Filed 3-8-22; 8:45 am]
BILLING CODE 8011-01-P

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